PGIM CEO Says ESG Investing Can’t Be Translated to Passive
(Bloomberg) -- PGIM Chief Executive Officer David Hunt said that sustainability-focused investing doesn’t translate to index-based strategies.
An active approach is key to making decisions about the environmental, social and governance traits of a security, Hunt said, speaking on a panel at the Milken Institute Global Conference Monday. He added that such decisions aren’t as easy as buying an index-tracking product.
ESG-focused ETFs have a total of approximately $91 billion in assets, up from $39 billion a year ago, according to Bloomberg Intelligence estimates.
“This is actually a very complicated problem, and anybody who thinks it’s going to be solved by a few speeches and a trip to Glasgow is going to be disappointed,” he said, referring to the location of an upcoming world summit on climate.
“If you really believe this is about a security by security-level decision, and you need to engage the owners of that security around ESG, then buying a market cap weighted index for a cheap price, I would say, is absolutely not consistent with that philosophy.”
PGIM is the investment management arm of Prudential Financial Inc.
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